Housing Figures: The Market Shows Signs of Recovery

June 9, 2020

Housing Figures: The Market Shows Signs of Recovery

Housing Figures is our monthly round-up of the top news stories related to residential new construction spending and the latest market numbers.  

May showed some bounceback from April’s lows, and it’s looking like the summer homebuying season could be a strong one. New listings are growing and applications for purchase mortgages are even higher than 2019 levels.  

New home purchases increased slightly in AprilThe latest numbers indicate that new single-family home sales increased 0.6 percent to the seasonally adjusted annual rate of 623,000 units in April. That’s up from March’s downwardly revised number of 619,000, but down 6.2 percent from 2019. Sales were up in all regions except for the West. [HUD] 

Housing indicators are beginning to turn around. Realtor.com’s housing data for May suggests signs of a recovery are emerging and that it’s likely April was the lowest point for the housing market. While for-sale homes are still low in inventory, new listings are growingThough May’s rate of decline in newly listed properties came in at 29.4 percent (year-over-year), it’s an improvement over April’s 44.1 percent year-over-year decline. [Realtor.com] 

Purchase applications spiked 18 percent over last year. For the seventh week in a row, applications for purchase mortgages grew. They’re now at a level that’s 18 percent higher than 2019. The trend suggests summer will be strong homebuying season thanks to pent-up demand. [HousingWire] 

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Most home builders used incentives to boost sales in May. More than half of single-family home builders used incentives to boost sales in May according to the latest NAHB/Wells Fargo Housing Market Index. The survey indicated that 48 percent of single-family builders did not use incentives, while 52 percent did use some kind of incentive — including offer options or upgrades, closing costs coverage and price discounts. [NAHB Now] 

Homebuying demand is up 22 percent. Redfin is reporting that for the full week of May 31, demand for buying homes was up 22 percent from pre-pandemic levels. The data marks the seventh consecutive week Redfin saw demand increase since dropping in April. Redfin also reports sellers are returning to the market, but new inventory is still very low. [Redfin] 

Pending home sales fell 21.8 percent in April. Pending home sales decreased for the second straight month to 21.8 percent in April, according to the National Association of Realtors. Contract signings decreased 33.8 percent year-over-year. However, it’s expected April represents the lowest point for pending contracts as NAR’s chief economist expects the market to bounce back. [NAR] 

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